Frequently Asked Questions Marketing terms and what they actually mean!
ACQUISITION COST: The cost associated with generating a new customer. Example: If we spend £500 to mail 1000 pieces and get a 1% return that's 10 customers— our Acquisition Cost is £50 per customer. ATTRITION: A reduction in response to a promotion or mail list due to repeated use. BREAK-EVEN: The amount of revenue a marketing activity must generate to cover costs. BROCHURE: A booklet designed to introduce a company to prospective clients of your services, and or products. CALL-TO-ACTION: Asking the potential customer to take immediate action — typically by calling a telephone number or completing and returning the response form or email link. COPY: The sales message used by in your marketing copy to make potential customers purchase your products and services.
COPYWRITER: A person whose job it is to write copy (see Copy)
COST PER ENQUIRY (C.P.E): Total cost of a lead generation promotion divided by the number of leads or enquiries generated.
COST PER ORDER (C.P.O): Total cost of promotion divided by the number of orders generated.
COST PER THOUSAND (C.P.M): 1)Total cost of a promotion divided by how many thousands of prospects were reached. A mailing costing £100,000 that mails to 200,000 prospects has a CPM of £500/M (£500 per thousand). 2) CPM is also applied to components of total promotion cost, such as mailing list rental, printing costs, postage costs, etc.
CROSS-SELLING: Selling a promotion across the board to other demographic lists within the company's database.
CUSTOMER RECORD: A record of a customer's name, email, address, telephone number, credit card numbers, buying history, etc.
DATABASE: A collection of customer records containing vital information about each customer or prospect.
DIRECT RESPONSE MARKETING: Promotions that solicit an immediate, measurable response from recipients.
GUARANTEE: Typically a promise to refund a customer's money if he or she is less than satisfied.
INBOUND TELEMARKETING: The process of handling incoming calls from customers or prospects.
ENQUIRER: A prospect who has requested more information about a product or service.
INSERT: Promotional piece placed in an outgoing package or invoice.
INTEGRATED MARKETING: A combination of two or more forms of marketing used to sell a product or service (e.g. a direct mail campaign combined with a series of television commercials).
INTERNET SERCH ENGINES: Websites such as Google, Yahoo, Lycos where you type a search phrase, keyword or query and it will bring up a list of relevant web pages.
KEYWORDS: Words typed into a web search engine relevant to the information required
LIFETIME VALUE: The total revenue a customer will generate for a company during the period they continue to buy. (May be over many years). May be expressed as total gross revenue or total net revenue.
MARGIN: The gross profit on sales derived by subtracting the cost of goods sold from gross revenue.
Market Positioning: How your business is perceived within the marketplace. i.e as budget, high quality, most knowledgable authority, family friendly, fastest service, widest range etc.
NEW CUSTOMER ACQUISITION: Promotions designed to attract new customers. OFFER: All of the factors included in the proposition being made to a prospect or customer — including price, quantity, length of subscription or membership, discounts, free gifts, guarantees, etc.
OUTBOUND TELEMARKETING: Calls that are placed by a marketer, as opposed to inbound telemarketing where the customer calls in first.
PERSONALISATION: The use of the prospect's name, address or other information in the text of a promotion.
PIGGY-BACK: An offer that hitches a free ride with another offer.
PREMIUM: A free item offered to a potential buyer.
PROSPECT: A potential buyer for a product or service who has yet to make a purchase.
PURGE: The process of removing duplicates and other unwanted names and addresses from a list or lists.
RESPONSE RATE: Number of responses received as a percentage of the total number of advertising impressions or pieces mailed.
RETURN ON INVESTMENT (ROI): Total net profit of a promotion divided by the cost of the promotion. An ROI of 100% indicates that the promotion broke even. ROLLOUT: After testing a campaign, to decide to continue it. Rollouts are typically larger than the test mailing and include promotion to larger list segments or entire list universes.
SALES LEAD: A prospect who has agreed to purchase or obtain further information. SEARCH ENGINE OPTIMISATION (SEO): Methods used to ensure a website is easily searchable by internet search engines. (see internet search engines)
SPLIT TEST: Representative samples from the same list, used for package tests, or to test homogeneity of the list.
TELEMARKETING: Using telecommunications in sales and marketing efforts. TEST PANEL: A term used to identify each of the parts or samples in a split test.
UNSUBSCRIBE: An option at the bottom of any mailing piece, either printed or in electronic form to remove yourself from the database
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